August 31, 2011

Why An Auto Insurance Quote Changes After A Buyer Is 25

Car insurance coverage is a necessary part of life for drivers in the United States. Each state requires that a driver carry a specific amount of car insurance coverage on their vehicle. Drivers tend to get their first auto insurance quote at age 16 when they can finally drive, and prices are generally high for young drivers. Most drivers look forward to the price drop for their coverage when they get older. Insurance companies deal in risk management and they have to look at statistics to determine cost of coverage for drivers. Auto insurance at 25 carries a significant decrease in price for most drivers. There are a few reasons for the price reduction including lower risk.

Young drivers under the age of 25 are considered to be high risk. This is the highest risk category and prices tend to be the highest you will pay. Teenagers and drivers in their early twenties statistically engage in high risk driving behavior that could cost the insurance companies a lot of money. Prices are higher to compensate for this increased risk for younger people. Auto insurance at 25 carries a price drop because that is the age where the statistics change significantly. Drivers over the age of 25 are seen as a much lower risk because on average, they engage in safer driving behaviors and cause fewer accidents every year.

Drivers can expect a significant drop in their auto insurance quote after their 25th birthday. Average number of accidents goes down for drivers over 25 and so does the average cost per accident. These drivers also tend to be safer on the road and receive fewer tickets. Tickets are an indicator of risky driving behavior and will drive the cost of your insurance up. Even though these drivers usually purchase more comprehensive coverage and have more expensive vehicles, the risk factor being lower leads to reduction in prices that can go as much as 30% for the same coverage amount that the driver had even at age 24. This is usually the biggest price drop that drivers will experience in their lives. Price continues to go down as drivers get older and have more experience but that drop that comes at 25 is the biggest because drivers are not in the highest risk category anymore.

Finding an auto insurance quote has never been easier. The internet provides a big marketplace for people to shop around for insurance and anything else they might need. Many insurance websites will take your information down and compare prices for you through a few different companies at a time. It is a good idea to obtain a new quote when you turn 25 to get the discounts.